Henry Blodget, a former securities analyst, lives in New York City. Read his full-disclosure statement about his potential conflicts of interest in covering the Martha Stewart trial
Likelihood the conviction will stand
Friday, July 16, 2004: 98 percent
Martha Stewart and Peter Bacanovic got the minimum sentences allowable under the federal guidelines: Five months in jail and five months of home detention. The sentences will be stayed pending appeal, which could last nine months or more. The chance that the convictions will stand remains 98 percent.
Martha went first. She wore black. When she glided into the courtroom, the gallery hushed, and the class-reunion atmosphere that had prevailed in the spectator benches—"I haven't seen you since the verdict!"—transformed into that of a funeral (or, rather, execution).
As is the custom in this solemn ceremony, Judge Cedarbaum addressed Stewart directly, asking whether she or her lawyer had anything to say. Bob Morvillo spoke first, requesting leniency: a sentence that avoided the "highest penalty" we place upon our citizens, the stripping away of their freedom. He suggested that Stewart's offenses had, in the end, hurt no one but herself. He cited the penalties Stewart has already paid, the loss of her job, her reputation, more than half of her net worth, the vicious and unceasing ridicule she has been subjected to over the past three years. He described the 1,500 letters written to the judge on her behalf, her extraordinary work ethic, the damage already inflicted upon her company and employees. He asked that, instead of going to jail, Stewart be allowed to work with poor women to help them improve their lives (vague, but productive-sounding).
Morvillo was articulate, but Stewart upstaged him. She stood up at the defendant's table, and, voice breaking, read a statement that, in the moment, sounded remarkably raw and heartfelt, a statement that, later, much less effectively, she would read portions of to the television cameras outside.
Today is a shameful day. It is shameful for me, for my family, and for my beloved company and all of its employees and partners. What was a small personal matter became over the last two and a half years an almost fatal circus event of unprecedented proportions spreading like oil over a vast landscape, even around the world. I have been choked and almost suffocated to death during that time. …
I ask that, in judging me, you remember all the good that I have done, all the contributions I have made through the company I founded, as well as personally over the past decades of my life that have been devoted almost entirely to productive, creative, and useful activities. I ask, too, that you consider all the intense suffering that I and so many dear others have endured every single moment of the past two and a half years. I seek the opportunity to continue serving my country and my community in the same positive manner I always have. I seek the opportunity to repair the damage wrought by the situation, to get on with what I have always thought was a good, worthwhile, and exemplary life.
My heart goes out to you and to everyone in this courtroom, and my prayers are with you. My hopes that my life will not be completely destroyed lie entirely in your competent and experienced and merciful hands. Thank you and peace be with you.
When Stewart sat down, the lead prosecutor, Karen Patton Seymour, rose. With the quiet confidence of a victor, Seymour reminded the court that Stewart was asking for leniency beyond that which "ordinary people" would receive and that, contrary to Morvillo's assertion, hers were serious crimes.
After a pause, Judge Cedarbaum asked Stewart to stand once again. Then, in a strong first-person ("I sentence you …"), she began: Five months in prison. Five months of home detention. Two years of probation. Two strangely minor (for Stewart) fines, including a "special assessment" of $400 that had to be paid immediately. (For what? Drinks and dinner?) Four hours later, with Peter Bacanovic and his family in attendance, the ritual would be repeated again.
All in all, the sentences feel fair. As Morvillo suggested, Stewart will have paid an enormous price even before her official "punishment" begins. Had this caused Judge Cedarbaum to depart from the sentencing guidelines, however, or had Stewart simply been allowed to "work with poor women" or be confined to her estate in Bedford, N.Y., there would have been little sense that justice was being done. Peter Bacanovic will also have paid an enormous pre-punishment price—less in absolute terms than Stewart's (he wasn't blessed with a billion dollars of stock to lose) but one that wipes him out financially and professionally.Unlike Stewart, when he gets out, he won't have a company, career, or fortune to return to.
Here is what was curious: The moment the sentences were read, the proceedings no longer felt like funerals. Instead, perhaps because five months is, well, five months and not five years, the uncertainty and dread disappeared, and, suddenly, there was light (life?) at the end of the tunnel. For the first time, we could see beyond jail. For the first time, the verdict wasn't the end. On the contrary—as the stock market instantly recognized, driving the stock of Martha Stewart Living Omnimedia up nearly 40 percent by day's end—no matter what happens next, there is now a very real point when this is going to end. In two years, most likely, Stewart will have exhausted her appeals, served her time, and reappeared. For the first time, in other words, Martha Stewart and Peter Bacanovic are closer to the end than the beginning.
On the steps outside, when she finished reading her now-stale statement, Stewart put the paper aside. She took a few sentences to warm up, but then, suddenly, she became her once and future self again. She ad-libbed. She pitched her products. She laughed. She donned her drill sergeant-homemaker-chief executive guise, reached through the camera and, summoning the indomitable drive and confidence that has taken her from a Westport, Conn., kitchen to global superstardom, grabbed her millions of fans by the lapels. "I'll be back," she said. "I will be back." And, love her or hate her, no one who has ever seen her in action would doubt it.
Photograph of Martha Stewart by Peter Morgan/Reuters.